Luojiang District of Quanzhou City, Fujian Province Curbs Corruption in Government Investment Projects

The CPC Commission for Discipline Inspection of Luojiang District of Quanzhou City, Fujian Province adopts the Scientific Outlook on Development as the guideline for their discipline inspection and supervision work and has prioritized preventing corruption in project development as a key task in eliminating corruption from its root cause and a pilot program of studying and implementing the Scientific Outlook on Development. The actions of monitoring the key procedures and innovating in measures addressing corruption s root causes have provided a solid guarantee for the implementation of the Scientific Outlook on Development.

First, strengthen the anti-corruption responsibility system. The district government has introduced the anti-corruption responsibility to the practices of studying and implementing the Scientific Outlook on Development. Party members and government officials in projects development, audit and supervision have been regarded as the major targets of anti-corruption education.

Caution education campaigns with typical corruption cases have been carried out. Other measures include circulating cases reports, conducting cases analysis, issuing Q&A on corruption and hosting workshops so that Party members and government officials can learn a lesson and use self-discipline to avoid corruption by understanding laws and Party disciplines in cases.

Anti-corruption archives for those involved in government investment projects have been established, which include their information and the information of their relatives on employment, new housing and home decoration so that the posts of some officials can be timely adjusted to avoid an interest chain; implement an anti-corruption entry system and an anti-corruption contract system, under which the construction contract is signed with the anti-corruption contract.

With the anti-corruption requirements and responsibilities clearly stated in the contract, officials can willingly accept the supervision of discipline inspection and supervision organs and competent government departments so that companies and agencies that used briberies can be prevented from participating in development of the administrated projects.

The district government has actively explored the implementation of a risk mechanism to ascertain survey and architectural design responsibilities. The government has hired 10 Party members with expertise in this field to be in charge of the appraisal and evaluation on the project design. If the architectural surveys and designs result in an over-20 percent increase of construction expenses over the original contract budget, the increased expenses shall be paid by the designing companies so as to avoid the conspiracy between designers and construction companies.

The former used to be irresponsible in surveys, designs and map reviews so that the design, which was different from the real construction, underwent changes. The designing company even cheated in the design map by allowing shortcomings so that the correction process can allow the developer to make more money during the construction.

Second, enhance the supervision on bid invitation and submission. In establishing a public bid mechanism for projects, the district government introduces a chief auditor (primary auditor), preview of auditing report, field inspection and a three-tier reexamination system so that all the items that need auditing can be audited.

Any project whose maximum budget of the base price has not been audited by the audit authorities cannot hold a public bid. Construction projects whose completion settlement has not been audited cannot have a financial settlement. The district government has combined three bid centers for construction projects, water reservation projects and transportation project into a public bid center for facilities construction in the district and requires all the projects with government fiscal investment or village committees investment of 200,000 yuan and above to be put to public bid in this bid center.

The district government has also enhanced the pre-bid supervision, simplify procedures according to law and experimented on online bid invitation. The district government establishes new procedures that bidding documents should be examined by competent government departments on its legitimacy, fairness and equitableness before registering itself with a digital version at District Department of Supervision so as to avoid any biased or exclusive provisions and prevent illegal acts, such as graft, opaque deals, conspiracy, bribery and illegal sub-contracting.

These measures have regulated the administration on public bids.

Third, the district government has intensified review on project licenses. The government supervises the developers both at the construction materials market and construction site, enhances the supervision on the construction process and ensures that managers at the construction sites and procurement of machinery and material strictly follow the commitments in the bid.

The government introduces a rating system in examining changes to projects licenses. To make changes to projects whose original contract costs are under 5 million yuan and estimated costs for single-item change are between 30,000 and 100,000 yuan or whose original contract costs are above 5 million yuan and estimated costs for single-item change are between 30,000 and 250,000 yuan, reports must be filed to competent government departments and competent officials of the district government for permission.

To make changes to projects whose original contract costs are under 5 million yuan estimated costs for single-item change are above 100,000 yuan or whose original contract costs are above 5 million yuan and estimated costs for single-item change are above 250,000 yuan, designing company, construction supervision company and construction company must confirm these changes before delivering related documents to competent government departments for examination.

Then the District Bureau of Construction will set up and head a five-people examination panel consisting of officials from audit authorities, administration on economy, trade, development and reform as well as fiscal department and a 10-people expert panel to conduct field inspections at the construction site.

A report should be filed to competent officials of the district government within three working days. Meanwhile, the whole process will be supervised by supervision and discipline inspection authorities to avoid overspending of these projects.

Fourth, strengthen the review on projects settlement. New measures include commissioned accountants, releasing reports of an independent accounting and auditing firm at the examination meeting, completing accounting and auditing in a limited period of time, releasing information on public announcements before settlement and a return visit after audits.

New measures of a field inspection system and a three-tier inspect system have achieved effective results. For example, during the auditing supervision of a project s settlement, the real estate owner and construction supervision company calculated the total costs at 14.34 million yuan for auditing while contractor calculated 15.

22 million yuan for auditing. The construction costs consulting company commissioned by the District Audit Office came up with a total cost of 14.26 million yuan. Later, after the reexamination on the auditing report completed by the commissioned costs consulting company, spot checks on the truthfulness, legitimacy and workload in the documents for audit and a field inspection on some parts of the project, another 535,000 yuan, or 3.

756 percent was deducted from the total costs. The contractor has been reported to construction authorities for lying about the insurance premium it pays for workers.

Fifth, the district government has strengthened the system of ascertaining responsibility. The government has established a responsibility ascertaining system in accordance with requirements of the Scientific Outlook on Development. In the new arrangement, the formal construction contract has to be signed after a joint inspection of district bureau economy, trade, development and reform, audit bureau, construction bureau and bureau of supervision on provisions on expenses, payment, material and equipment supplies, project changes, completion-based check and acceptance, settlements and penalties for breaking a contract so as to avoid the situation that government leaders use their powers to interfere with the bid invitation and submission of projects and force companies winning the bid to sign two different contracts or to change discount rates.

The district government has established credit records for construction companies and agencies. Companies with a poor credit record or construction quality record will be severely punished or even kicked out of the market. If the engineering survey company fails to conduct surveys according to engineering compulsory standards, cheats in survey results or produces inaccurate results, which results in mistakes of designing companies, changes to the design due to field difference or space for construction company s maneuvers, it will receive a warning, exposure on public announcements and administrative penalty according to related rules for the first time; it will be kicked out of the market besides the punishment of exposure on public announcement, administrative punishment and pursuing responsibilities according to contract provisions.

The company will not be able to commission any project in this district for three years. Responsibilities of Party members and leaders who break the law will be ascertained and they will be transferred to judicial organs.

Since last year, the five-people review panel on project changes has rejected several unreasonable applications, which saves government investment totaling nearly 10 million yuan; the inspection panel has levied fines of 100,000 yuan and 50,000 yuan on two companies which respectively had no project manager and chief supervision engineer at the construction sites, ascertained their responsibility stipulated in the contract and had conversations with related people in charge or asked them to write a statement of self-criticism.

The audit authorities has reduced expenses on government investment projects by 68.65 million yuan, collected evaded project taxation totaling 560,000 yuan, levied fines of 530,000 yuan, put forward 87 pieces of suggestions on enhancing and regulating the management of construction projects and stripped two government officials involved in graft in construction of his CPC membership and transferred them to judicial organs to ascertain their criminal responsibility, had nine warning conversations and collected three written self-criticism from government employees whose mistake in work has not caused massive losses or whose misconduct reported by the public has been confirmed but has not broken the Party discipline.

These measures have achieved sound economic and social results and provided a solid guarantee for the implementation of the Scientific Outlook on Development.

(Source: CPC Commission for Discipline Inspection of Luojiang District, Quanzhou City, Fujian Province)